The recent escalation involving Iran could push food prices higher globally, but mostly indirectly rather than through immediate shortages of food itself. The Middle East is not a major exporter of staple foods like wheat or rice, but it sits at the very centre of the global energy, shipping and fertiliser systems that underpin modern agriculture.
First of all, the biggest channel is energy prices. Fighting in and around the Persian Gulf raises fears that oil supplies could be disrupted, particularly if shipping through the Strait of Hormuz, one of the world’s most important energy chokepoints, is threatened. Oil prices have already risen as markets price in this risk, with domestic oil suppliers unable to provide valuations for more than 24 hours. Agriculture relies heavily on diesel, transport fuel and energy-intensive processing, so higher oil prices tend to feed directly into higher food costs over time.
Secondly, the conflict threatens fertiliser markets, which could have a much larger long-term impact. A significant share of global nitrogen fertiliser trade moves through the Gulf region and the Strait of Hormuz. For the same reasons, if shipping there is disrupted, fertiliser supplies could tighten and prices rise. Fertiliser is one of the largest input costs for farmers, so increases often translate into higher production costs for crops such as wheat, corn and rice.
Thirdly, the war is affecting shipping and supply chains. Attacks and instability in the region have already delayed cargo and forced ships to reroute, sometimes adding weeks to journeys and raising freight costs and insurance premiums. Higher transport costs increase the price of imported food and raw ingredients around the world.
Finally, commodity markets themselves react quickly to geopolitical risk. Agricultural futures linked to oil markets have already moved, with products like soybean oil rising alongside crude prices. Even when physical supplies are unchanged, this financial volatility can push retail food prices upward.
In the short term, consumers may not see dramatic price spikes immediately. But if the conflict persists or disrupts the Strait of Hormuz for an extended period, the combined effect of higher fuel, fertiliser and shipping costs could push global food prices higher over the coming months.
